November 11, 2010

Blocked from major new domestic initiatives by a Republican victory in the midterm elections, President Barack Obama promptly lit out for Asia, a far more promising arena. That continent, after all, is rising, and Obama is eager to grasp the golden ring of Asian success.

Beyond being a goodwill ambassador for ten days, Obama is seeking sales of American-made durable and consumer goods, weapons deals, an expansion of trade, green energy cooperation, and the maintenance of a geopolitical balance in the region favorable to the United States. Just as the decline of the American economy hobbled him at home, however, the weakness of the United States on the world stage in the aftermath of Bush-era excesses has made real breakthroughs abroad unlikely.

Add to this the peculiar obsessions of the Washington power elite, with regard to Iran for instance, and you have an unpalatable mix. These all-American fixations are viewed as an inconvenience or worse in Asia, where powerful regional hegemons are increasingly determined to chart their own courses, even if in public they continue to humor a somewhat addled and infirm Uncle Sam.

Although the United States is still the world’s largest economy, it is shackled by enormous public and private debt as well as fundamental weaknesses. Rivaled by an increasingly integrated European Union, it is projected to be overtaken economically by China in just over a decade. While the president’s first stop, India, now has a nominal gross domestic product of only a little over a trillion dollars a year, it, too, is growing rapidly, even spectacularly, and its GDP may well quadruple by the early 2020s. The era of American dominance, in other words, is passing, and the time (just after World War II) when the United States accounted for half the world economy, a dim memory.

The odd American urge to invest heavily in perpetual war abroad, including "defense-related" spending of around a trillion dollars a year, has been a significant factor further weakening the country on the global stage. Most of the conventional weapons on which the United States continues to splurge could not even be deployed against nuclear powers like Russia, China and India, emerging as key competitors when it comes to global markets, resources and regional force projection. Those same conventional weapons have proved hardly more useful (in the sense of achieving quick and decisive victory, or even victory at all) in the unconventional wars the United States has repeatedly plunged into—a sad fact that Bush’s reckless attempt to occupy entire West Asian nations only demonstrated even more clearly to Washington’s bemused rivals.

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American weapons stockpiles (and copious plans for ever more high-tech versions of the same into the distant future) are therefore remarkably irrelevant to its situation, and known to be so. Meanwhile, its economy, burdened by debts incurred through wars and military spending sprees, and hollowed out by Wall Street shell games, is becoming a B-minus one in global terms.

A Superpower With Feet of Clay

Just how weakened the United States has been in Asia is easily demonstrated by the series of rebuffs its overtures have suffered from regional powers. When, for instance, a tiff broke out this fall between China and Japan over a collision at sea near the disputed Senkaku Islands, Secretary of State Hillary Clinton offered to mediate. The offer was rejected out of hand by the Chinese, who appear to have deliberately halted exports of strategic rare-earth metals to Japan and the United States as a hard-nosed bargaining ploy. In response, the Obama administration quickly turned mealy-mouthed, affirming that while the islands come under American commitments to defend Japan for the time being, it would take no position on the question of who ultimately owned them.

Likewise, Pakistani politicians and pundits were virtually unanimous in demanding that President Obama raise the issue of disputed Kashmir with Indian Prime Minister Manmohan Singh during his Indian sojourn. The Indians, however, had already firmly rejected any internationalization of the controversy, which centers on the future of the Muslim-majority state, a majority of whose inhabitants say they want independence. Although Obama had expressed an interest in helping resolve the Kashmir dispute during his presidential campaign, by last March his administration was already backing away from any mediation role unless both sides asked for Washington’s help. In other words, Obama and Clinton promptly caved in to India’s insistence that it was the regional power in South Asia and would brook no external interference.

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This kind of regional near-impotence is only reinforced by America’s perpetual (yet ever faltering) war machine. Nor, as Obama moves through Asia, can he completely sidestep controversies provoked by the Afghan War, his multiple-personality approach to Pakistan, and his administration’s obsessive attempt to isolate and punish Iran. As Obama arrives in Seoul, for instance, Iran will be on the agenda. This fall, South Korea, a close American ally, managed to play a game of one step forward, two steps back with regard to Washington-supported sanctions against that energy-rich country.

The government did close the Seoul branch of Iran’s Bank Milli, sanctioning it and other Iranian firms. Then, the South Koreans turned around and, according to the Financial Times, appointed two banks to handle payments involving trade between the two countries via the (unsanctioned) Tehran Central Bank. In doing so, the government insulated other South Korean banks from possible American sanctions, while finding a way for Iran to continue to purchase South Korean autos and other goods.

Before the latest round of UN Security Council sanctions South Korea was doing $10 billion a year in trade with Iran, involving some 2,142 Korean companies. Iran’s half of this trade—it provides nearly 10 percent of South Korea’s petroleum imports—has been largely unaffected. South Korea’s exports to Iran, on the other hand, have fallen precipitously under the pressure of the sanctions regime. Sanctions that hold Iran harmless but punish a key American ally by hurting its trade and creating a balance of payments problem are obviously foolish.

The Iranian press claims that South Korean firms are now planning to invest money in Iranian industrial towns. Given that Obama has expended political capital persuading South Korea to join a US-organized free trade zone and change its tariffs to avoid harming the American auto industry, it is unlikely that he could now seek to punish South Korea for its quiet defiance on the issue of Iran.

China is the last major country with a robust energy industry still actively investing in Iran, and Washington entertains dark suspicions that some of its firms are even transferring technology that might help the Iranians in their nuclear energy research projects. This bone of contention is likely to form part of the conversation between Obama and President Hu Jintao before Thursday’s G20 meeting of the world’s wealthiest twenty0 countries.

Given tensions between Washington and Beijing over the massive balance of trade deficit the United States is running with China (which the Obama administration attributes, in part, to an overvalued Chinese currency), not to speak of other contentious issues, Iran may not loom large in their discussions. One reason for this may be that, frustrating as Chinese stonewalling on its currency may seem, they are likely to give even less ground on relations with Iran—especially since they know that Washington can’t do much about it. Another fraught issue is China’s plan to build a nuclear reactor for Pakistan, something that also alarms Islamabad’s nuclear rival, India.

Rising Asia

If you want to measure the scope of American decline since the height of the cold war era, remember that back then Iran and Pakistan were American spheres of influence from which other great powers were excluded. Now, the best the United States can manage in Pakistan is the political (and military) equivalent of a condominium or perhaps a time-share—and in Iran, nothing at all.

Despite his feel-good trip to India last weekend, during which he announced some important business deals for US goods, Obama has remarkably little to offer the Indians. That undoubtedly is why the president unexpectedly announced Washington’s largely symbolic support for a coveted seat as a permanent member of the United Nations Security Council, a ringing confirmation of India’s status as a rising power.

Some Indian politicians and policy-makers, however, are insisting that their country’s increasing demographic, military and economic hegemony over South Asia be recognized by Washington, and that the United States cease its support of, and massive arms sales to, Pakistan. In addition, New Delhi is eager to expand its geopolitical position in Afghanistan, where it is a major funder of civilian reconstruction projects, and is apprehensive about any plans for a US withdrawal from that country. An Indian-dominated Afghanistan is, of course, Pakistan’s worst fear.

In addition, India’s need for petroleum is expected to grow by 40 percent during the next decade and a half. Energy-hungry, like neighboring Pakistan, it can’t help glancing longingly at Iran’s natural gas and petroleum fields, despite Washington’s threats to slap third-party sanctions on any firm that helps develop them. American attempts to push India toward dirty energy sources, including nuclear power (the waste product of which is long-lived and problematic) and shale gas, as a way of reducing its interest in Iranian and Persian Gulf oil and gas, are another Washington "solution" for the region likely to be largely ignored, given how close at hand inexpensive Gulf hydrocarbons are.

It is alarming to consider what exactly New Delhi imagines the planet’s former "sole superpower" has to offer at this juncture—mostly US troops fighting a perceived threat in Afghanistan and the removal of Congressional restrictions on sales of advanced weaponry to India. The US military in Afghanistan is seen as a proxy for Indian interests in putting down the Taliban and preventing the reestablishment of Pakistani hegemony over Kabul. For purely self-interested reasons, Prime Minister Singh has long taken the same position as the new Republican majority in the House of Representatives, urging Obama to postpone any plans to begin a drawdown in Afghanistan in the summer of 2011.

The most significant of the Indian purchases trumpeted by the president last weekend were military in character. Obama proclaimed that the $10 billion in deals he was inking would create 54,000 new American jobs. Right now, it’s hard to argue with job creation or multibillion-dollar sales of US-made goods abroad. As former secretary of labor Robert Reich has pointed out, however, jobs in the defense industry are expensive to create, while offering a form of artificial corporate welfare that distorts the American economy and diverts resources from far more crucial priorities.

To think of this another way, President Obama is in danger of losing control of his South Asian foreign policy agenda to India, its Republican supporters in the House and the military-industrial complex.

As the most dynamic region in the world, Asia is the place where rapid change can create new dynamics. American trade with the European Union has grown over the past decade (as has the EU itself), but is unlikely to be capable of doubling in just a few years. After all, the populations of some European countries, like powerhouse Germany, will probably shrink in coming decades.

India, by contrast, is projected to overtake China in population around 2030 and hit the billion-and-a-half-inhabitants mark by mid-century (up from 1.15 billion today). Its economy, like China’s, has been growing 8 percent to 9 percent a year, creating powerful new demand in the world market. President Obama is hoping to see US exports to India double by 2015. Likewise, with its economy similarly booming, China is making its own ever more obvious bid to stride like a global colossus through the twenty-first century.

The Hessians of a Future Asia?

Unsurprisingly, beneath the pomp and splendor of Obama’s journey through Asia has lurked a far tawdrier vision—of a much-weakened president presiding over a much weakened superpower, both looking somewhat desperately for succor abroad. If the United States is to remain a global power, it is important that Washington offer something to the world besides arms and soldiers.

Obama has been on the money when he’s promoted green-energy technology as a key field where the United States could make its mark (and possibly its fortune) globally. Unfortunately, as elsewhere, here too the United States is falling behind, and a Republican House as well as a bevy of new Republican governors and state legislatures are highly unlikely to effectively promote the greening of American technology.

In the end, Obama’s trip has proven a less than effective symbolic transition from George W. Bush’s muscular unilateralism to a new American-led multilateralism in Asia. Rather, at each stop, Obama has bumped up against the limits of American economic and diplomatic clout in the new Asian world order.

George W. Bush and Dick Cheney thought in terms of expanding American conventional military weapons stockpiles and bases, occupying countries when necessary, and so ensuring that the United States would dominate key planetary resources for decades to come. Their worldview, however, was mired in mid-twentieth-century power politics.

If they thought they were placing a marker down on another American century, they were actually gambling away the very houses we live in and reducing us to a debtor nation struggling to retain its once-commanding superiority in the world economy. In the meantime, the multimillionaires and billionaires created by neoliberal policies and tax cuts in the West will be as happy to invest in (and perhaps live in) Asia as in the United States.

In the capitals of a rising Asia, Washington’s incessant campaign to strengthen sanctions against Iran, and in some quarters its eagerness for war with that country, is viewed as another piece of lunatic adventurism. The leaders of India, China and South Korea, among other countries, are determined to do their best to sidestep this American obsession and integrate Iran into their energy and trading futures.

In some ways, the darkest vision of an American future arrived in 1991 thanks to President George H. W. Bush. At that time, he launched a war in the Persian Gulf to protect local oil producers from an aggressive Iraq. That war was largely paid for by Saudi Arabia and Kuwait, rendering the US military for the first time a sort of global mercenary force. Just as the poor in any society often join the military as a way of moving up in the world, so in the century of Asia, the United States could find itself in danger of being reduced to the role of impoverished foot soldier fighting for others’ interests, or of being the glorified ironsmiths making arsenals of weaponry for the great powers of the future.